Tag Archives: unemployment

2011: Crisis-driven Bosses Attack, But Class Struggle Alive and Well

The events of 2011 served to remind us of two important aspects of capitalist society. First, the bosses of the world, caught in a sharpening struggle against their rivals and a spreading financial crisis, always have their knives out to assault the working class. Attacks intensified against our jobs, education, health, homes and families. The myths of democracy, fairness and opportunity for workers were exposed by a worldwide reality: we live under the bosses’ dictatorship. The past year made clear that regardless of national boundaries, no matter the “race” or gender of the boss, the ruling class will eagerly consign workers to hell on earth for the smallest gain in profit.

The ultimate expression of the boss’s callousness to sacrifice the lives of workers is imperialist war, of which there was no shortage in 2011. The U.S., still the main capitalist power in the world, continued its racist massacres in Iraq, Afghanistan and Pakistan in hopes of securing the Middle East’s oil and natural gas. Without the growth of a new worldwide communist movement, the prospects for 2012 and beyond are not much better.

While the U.S. remains the dominant power, other rivals, most prominently China, are gaining power — militarily, economically and politically. This challenge does not go unnoticed by the U.S. ruling class. The recent announcement by President Obama (the Nobel Peace Prize winner) that U.S. Marines will be stationed in northern Australia, alongside the recent diplomatic overtures to Myanmar, which borders China, signal a future where direct military conflict between the U.S. and China will be increasingly likely.

But the deadly maneuvering of the ruling class is only one side of the story of 2011. The second lesson, clearly visible from a quick look back through the pages of any of the bosses’ newspapers, is that workers are not meekly accepting these attacks. Class struggle is alive and well.  The list of places where large-scale rebellion rocked the bosses this past year is a long one: Algeria, Bangladesh, Colombia, Egypt, England, France, Greece, Israel/Palestine, Libya, Mexico, Pakistan, Spain, Syria, the U.S., and more.

To advance the cause of communist revolution, the international Progressive Labor Party has joined and led some of these militant struggles. In the pages of CHALLENGE, these battles and many other reports of class struggle were presented with a communist analysis.  If we are ever to defeat the murderous bosses and end their reign of terror, the working class must transform these narrow reform struggles into a fight for the working class to take state power — a fight for communist revolution.

The International PLP Advances

In New York City, the working class took on the racist Department of Education and its plan to impose Jim Crow-style segregation at the John Jay Campus high schools. In Israel/Palestine, a Summer Project participated in the fight against racist evictions and the housing shortage gripping workers there. In Haiti, we struggled to help rebuild a shattered society with communist principles of international solidarity and equality.

PL’s Summer Project in Haiti included a “Freedom School” for the discussion of communist principles. “Serve the working class” became more than a motto; it was put into practice when Party members created a clinic to serve the medical needs for Haitians in tent camps. The racist health care system was also a focus for comrades in the U.S. In New York we fought against the racist closing of Brookdale Hospital. Comrades and friends in Philadelphia fought to prevent the firing of a trusted hospital coworker. In Chicago, where hospital bosses tried to give patients a death sentence by transferring them to a decrepit facility, PL and others fought back.

Chicago was also the battleground for the heroic efforts of students and parents (primarily mothers), supported by the Party, to prevent the racist closing of the Whittier School library. Providing an example for the Occupy movement to follow, the parents (primarily mothers) and students at this majority Latino school, supported by the Party, seized the building and renamed it “La Casita.” For nearly a month, they held off the racist dogs of the Chicago Department of Education from carrying out their plan. Our comrades helped in many ways, from medical care to overnight guard duty. All the while they pointed out that whether we won or lost this particular battle, the bosses would still have state power. Our job is to fight not only “our” bosses, but bosses everywhere.

In Pakistan and Bangladesh, communists infused labor struggles in garment factories and universities with a vision of a society based on need rather than profit. In Mexico, where flooding threatened to destroy a community of 200,000 people, the Party explained that if our communist predecessors in the Soviet Union could move entire factories over the Ural mountains in three months during World War II, we could protect their city — if we had state power.

In these places and others around the world, CHALLENGE was ever-present. It consistently hammered home the point that it is only when we take on capitalism itself — when we transform battles against corrupt dictators, greedy bankers and fascist school boards into a world-wide communist movement — will we achieve workers’ liberation.

Arab Spring and Wall Street Occupy Working Class’s Imagination

Perhaps the most significant expressions of working-class fight-back were the upheavals in North Africa and the Middle East, collectively dubbed the Arab Spring, and in the Occupy Wall Street movement, a worldwide rage at the inequality of wealth that is the hallmark of capitalism.

The Arab Spring began with a rebellion in Tunisia that followed the self-immolation of a desperate young worker. But the uprising was fueled by a 13% official unemployment rate (about 30% for youth), skyrocketing prices for food, and political corruption. Similarly, in Egypt, while the bourgeois media focused on Cairo’s Tahrir Square and the struggle for “democracy,” the real battles were over rampant unemployment and the price of food. Strikes at Egypt’s textile mills, pharmaceutical plants, chemical industries, the Cairo airport, the transportation sector, banks, ports and the Suez Canal are the primary source of revolutionary optimism.

Workers throughout the world cheered on scenes from Tunisia and Tahrir Square, which makes the outcome of these battles all the more painful. In Egypt, ruthless dictator Hosni Mubarak was first replaced by a ruthless military and now in addition by the even more ruthless Muslim Brotherhood and Salafists (see CHALLENGE, 10/19). In Tunisia, President Zine El Abidine Ben Ali was ousted and elections were held in October, but unemployment still crushes the youth there. This is the essence of reform struggles. However militant it may be, any struggle that fails to attack the entire capitalist system will simply replace one set of bosses with another. For workers, the promise of a new society has been met with the reality of continued joblessness and misery.

Nonetheless, the international working class proudly looked on as workers in Tahrir Square held up signs reading, “We are all Wisconsin,” a reference to the 100,000-strong protest against the attack on public sector workers in that state. Months before anyone occupied a park near Wall Street, thousands of workers occupied the state capitol building in Madison, Wisconsin.

Just as in Cairo, however, the brave workers of Wisconsin have been misled, this time into backing electoral politics and the Democratic Party. In the midst of this struggle, the Party brought forward the idea that both the fascist Governor Scott Walker and the supposedly “heroic” Democrats were all defenders of capitalism — and were all therefore enemies of the working class. This communist idea attracted many workers in Wisconsin and around the world.

In September, the Occupy Wall Street (OWS) movement began in New York City before spreading to more than 1,500 cities worldwide. OWS captured the attention of workers who were tired of seeing banks get trillions of dollars in bailouts while education, transportation, health care, wages and jobs are slashed. One chant especially reflected this anger: “Banks got bailed out; We got sold out!” Throughout 2011, the Party participated in many of these occupations, picket lines, schools, churches and job sites, armed with leaflets and CHALLENGE.

PLP continues to strive to replace the dead-end reform tactics of the old communist movement with the fight for revolutionary communism for billions of workers in the world.

May Day

This past year was the 140th anniversary of the Paris Commune, the first time workers took control of the state. In this spirit, we celebrated May Day with marches, dinners and songs. From Colombia to El Salvador, in Los Angeles and New York, in Haiti and Palestine, we raised the red flag honoring our revolutionary ancestors. This year our May Day celebrations grew in size and better reflected the international character of the working class.

Turning Fascist Oppression into Communist Organizing

The working class continues to suffer from the racist exploitation and oppression that capitalism requires. In their increasingly desperate competition for dominance, the various national ruling classes outdo one another in making workers homeless, sick, maimed or killed in pursuit of profit. Frantic about “sovereign debt,” collapsing banks, currency disasters (notably the euro) and the industrial crisis of overproduction, the world’s bosses are peeling back their thin masks of “democracy” to reveal the bloody maw of a fascist monster. Meanwhile, the fight over Central Asian and Middle Eastern oil and natural gas appears to be careening toward broader military conflicts.

As we move into 2012, the battles against our capitalist enemies will continue to rage. The workers of the world will continue to fight back, in ways large and small. Everything we do as workers and communists counts: every march or picket line or discussion strengthened by  communist ideas, every time we help another worker and demonstrate how we can build a society without the parasitic bosses. By doing these things and more, the Party will help the working class move closer to ushering in a classless society that produces for need, not profit. Communist ideas are essential for this crucial advance. A mass, international, revolutionary party is necessary to lead the way. PL is that party. Now is the time to join!

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The Crisis of Capitalism: Earthquake for California Workers

Community college administrators and student-government leaders plan to mobilize students to demand “revenue enhancement” (higher taxes) instead of budget cuts with rallies and marches in Pasadena (Feb. 27) and Sacramento (March 16). Members and friends of the communist PLP are organizing students and workers to participate around the theme: Smash budget cuts and racist unemployment! Make the bosses pay! This system — which can’t provide education, housing or health care for all — must be destroyed!

More than 600,000 California workers lost full-time jobs between November 2007 and November 2008.  Close to a million are officially “unemployed;” a million more can find only part-time work or have given up looking. Nearly 200,000 more aren’t counted because they are in jail. In L.A., the real unemployment and underemployment rate is close to 20% and double that for black and Latino workers. Many who still have jobs are forced to take pay cuts, like San Jose teachers and CSULB workers who agreed to a two-day “furlough.”

The California budget deficit is now $42 billion. The bosses plan to increase the sales tax, reduce dependent tax credits, and cut billions from education while increasing tuition 9.3% in the University of California (UC) system, 10% in the California State University (CSU) system, and up to 50% in the community colleges.

As paychecks shrink, as IOUs are threatened in place of state income tax refunds, as financial aid checks shrink, more students and workers seek answers. Using our revolutionary ideas in patient long-term struggle we can build a base for communism.

“I gave a report on capitalism to my English class, but nobody reacted much,” a community college student, who is a Navy vet, told a student activist friend. She urged him to keep it up. “Its good to have a chance to talk about things like this. When they don’t know what they think about something, it doesn’t mean they aren’t paying attention.”

Communists Fight Budget Cuts, Racism, Liberal Misleaders, Capitalism

Under capitalism, workers can’t pay for needs, like health care, especially when wages are falling and racist unemployment is skyrocketing. Bosses push the lie that people who use public programs and services are being “selfish” or “greedy” for taking advantage of “entitlement programs” instead of “paying their fair share.” The racist idea of a “culture of poverty” encourages workers to blame other workers instead of the system. This racism justifies cuts in programs like CalWorks which supports many community college students and their children. This same racism aims to pit us against each other.  As communists we fight racism showing that it attacks all workers, building a united working-class movement to fight back.

Our Future Depends on Revolution, Not Reform

Liberal leaders want us to rely on them to fight the cuts, saying the community college system is the “key to California’s economic recovery” since many unemployed people come back for new skills or a new career.

But unemployed workers will now pay more for their classes with no promise of a job when they’re done. Any “economic recovery” for the capitalist bosses will come off the backs of the working class and from wider, deadlier wars.

We can’t rely on liberal capitalist politicians. The deepening crisis is an opportunity to build working-class unity, expose capitalism, sharpen the class struggle against the bosses and build the revolutionary Party that will one day lead workers to take power and build a communist society. We’ll meet the needs of the international working class, eliminating profits and banks.  We plan to expand the readership of CHALLENGE newspaper now and rely on our readers to bring these ideas into the movement against racist unemployment and budget cuts.
In doing so, we educate ourselves. We reveal the class system, our place in it, and our power to eliminate it. In our study groups we learn history, political economy, philosophy, and science so that we can understand what a revolution and an egalitarian communist society would look like. Join us!

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27 Million Jobless in U.S.: Racist Unemployment an Attack on All Workers

U.S. capitalism — the “world’s greatest superpower” and “history’s most powerful economy” — is sinking into another Great Depression. Its Total Unemployment figure (see below) is nearly 25 million, 13.5% of the labor force (NY Times, 1/10/09, and all following quotes) and by early next year could conceivably hit 20%. “This recession is going to be…long and…deep,” the longest since the 1930s. Millions of workers are also losing their jobs, from Spain to China.

Great Depression II is causing untold hardships for tens of millions of workers, and double that for black and Latino workers because of the racist nature of unemployment (see below). Lost wages, stolen pensions, workers losing their homes in the 8th “recession” in 60 years: that’s the “fruit” of an anarchic economic system driven by profits. Despite the bosses’ claims that “communism doesn’t work,” that “communism is dead,” it is capitalism that is destroying the lives of hundreds of millions worldwide, through Depressions and imperialist wars for oil and pipelines to defend their system. Only a massive communist-led workers’ revolution will end this capitalist nightmare.

In the Great Depression 75 years ago, the capitalist world threw tens of millions onto the streets. Only one country had no unemployment: the Soviet Union. Its system was not motivated by profit but by collective actions of its working class to produce for the needs of the whole class, not for the profits of a few bosses, which is why world capitalism tried to destroy it. Although that revolution was reversed, the ideas that produced it did not die and will live again based on the revolutionary ideas and actions of the communist Progressive Labor Party.

Well over a century ago, Karl Marx discovered the source of capitalism’s anarchy, of the never-ending cycle of boom and bust, of periodic depressions: the over-production of the means of production. Within every industry, in the drive for maximum profits, each capitalist builds factory after factory, attempting to capture as much of the market as possible without any overall plan, trying to slow the falling rate of profit. The result? Far more is produced than the market can absorb. So in their attempt to maintain profits, or even survive, bosses must reduce costs, the “easiest” being labor costs. This is precisely what’s happening now, and without mentioning Marx, the capitalist pundits agree.

NY Times columnist Paul Krugman, one of the system’s leading economists, wrote (1/9/09): “A huge gap is opening up between what the American economy can produce and what it’s able to sell.” Krugman quotes the Congressional Budget Office statement that “economic output over the next two years will average 6.8% below its potential,” which Krugman says “translates into $2.1 trillion of lost production.” And the bosses’ latest hand-picked defender of their system, Barack Obama — in attempting to close this gap between what capitalism can produce and what it can sell — has a plan that Krugman says “could easily end up doing less than a third of the job.”

So the bosses handle this crisis of overproduction “The simplest way…drain their inventories and fire their workers.” The Times says there is “a pervasive fear among employers that if they fail to shed workers quickly, their companies may go under in a recession poised to become the worst since the 1930s” — “everywhere you look that is what is happening now.” For the bosses, “laying off [workers] is an effort to survive.” Bosses “solve” their crises on the backs of workers. (For PLP’s fight-back plan, see editorial page 4)

The “official” figure of 11.1 million unemployed, plus 8 million part-timers unable to find full-time jobs, plus 5.2 million “discouraged” workers — those who have given up looking for non-existent jobs — the Times calls this “Total Unemployment” — or 24.3 million. Add 1.7 million imprisoned for non-violent offenses (70% black and Latino), who would be unable to find work in this crisis, plus possibly another million who joined the military because they couldn’t find jobs, and a Grand Total Unemployment” becomes 27 million! (This excludes those on welfare because they can’t find jobs.)

Such is “American prosperity” in the 21st Century.
This recession for workers overall is already a depression for black and Latino workers because of racist discrimination: last hired, first fired. Their jobless rates are twice that of white workers. If the Total Unemployment rate quoted above is 13.5% for workers in general, it is 27% for black workers. The Big 3 meltdown is even deadlier for black auto workers in cities like Detroit and Flint. This super-exploitation of black and Latino workers — central to the existence of U.S. capitalism — produces super-profits for the bosses, through lower wages and benefits, accounting for one-third of the nearly $700 billion of U.S. net corporate profits in 2003.

The bosses’ media say the Madoffs, the sub-prime mortgage scam and the housing bubble led to this crisis. But overall, these swindlers are motivated by the drive for maximum profit as fast as they can get it. That profit drive is behind the overproduction leading to periodic recession/depressions. U.S. capitalism had no unemployment during World War II when it “solved” the 1930s Great Depression by putting 14 million workers and youth into the military. “Peacetime” capitalism has always created millions of jobless and always will.

It is in the class interest of all workers to fight racist unemployment because the bosses use this political and economic weapon to divide and super-exploit ALL workers. Many workers support union leaders’ claim that immigrant and “foreign” workers “steal ‘our’ jobs.” This racism lets the bosses carry out mass firings, weakening the entire working class.

The anti-racist, international unity of all workers is crucial in the fight for a system without any profit-hungry bosses and their racist unemployment. Only with a system based on workers reaping the full benefit of their collective production and allotting it according to need — communism — will the working class realize our full potential, free of the horrors of capitalist depressions and wars. That’s PLP’s goal. Join us.

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FIGHT VS. BOSSES’ RACIST UNEMPLOYMENT

“Our future is looking bleak, to say the least!” email from a Chicago Ford Worker.
For two consecutive weeks, more than 500,000 workers made new claims for unemployment insurance. The UN’s International Labor Organization estimates that the current crisis will increase the unemployment lines by tens of millions worldwide. This will be a terrible strain for the hundreds of millions deeply affected by this crisis.

Galveston, Texas has gone through many hurricanes and always recovered. Not this time. The workers and jobs are gone, people’s lives devastated. The University of Texas is laying off 3,800 workers at the University of Texas Medical Branch. The layoffs will destroy what was one the country’s premier hospitals and Galveston’s largest employer. Renown for its trauma unit, the hospital served mainly working-class patients, and was an economic center on the island. While a shrunken hospital will continue to operate, it will in all likelihood never return to what it was.

“Karen H. Sexton, vice president for hospitals and clinics was caught in a trap…acknowledged the cutbacks might be permanent. ‘We know we have to be a lot smaller now.’” (NYT 11/14/08)
Like in New Orleans before it, Galveston’s workers are scattered to the wind with no shot at recovery. We cannot take this lying down, not again, because much more is still to come as the bosses “solve” their crisis on the backs of the working class.

We must learn to respond to these attacks and fight back. There is much we can do. Whether we are in unions or not, we can set up unemployment committees to keep laid-off workers in the struggle and united with their brothers and sisters at work. We can fight to make every part-time worker a full-timer and organize factory committees, union or not, to fight evictions and make sure no co-worker is homeless.

We can move evicted families back into their homes and organize to defend them from a return visit by the sheriffs. In the high schools and colleges, students and teachers can do the same. We can participate in community centers and churches that organize soup kitchens and food pantries.

These centers and struggles can become schools for communism as we engage volunteers and those in need of assistance in political discussion about the nature of the profit system and the need to destroy it.  We can expand the circulation of CHALLENGE and make our paper the flag of those fighting back. We can build the PLP out of these struggles.

No worker, woman or man, black, Latino or white, immigrant or citizen, will escape the growing depression. Racist unemployment, which is double for black workers than for white (and four times higher for black youth), will soar as wages and services collapse. These are not only racist attacks in terms of those workers losing their jobs, but also for those most affected by service cuts. About two-thirds of the unemployed receive no benefits. Chicago’s Cook County Health Bureau,which closed half the clinics for uninsured workers and slashed 2,000 jobs in 2007, is destroying another 500 jobs on January 1. Billionaire NYC Mayor Michael Bloomberg just ordered the closing of all free city-run children’s dental clinics and is laying off 5,000 workers.

Smash Racist Unemployment With Communist Revolution

The real unemployment numbers are twice as high as those reported when you figure in the under-employed, 2.4 million mainly 70% black and Latin in jail, and 12 million undocumented workers and youth facing racist detention camps and deportations just for looking for work. “And as bad as these numbers are, they may look good a year from now because things are going to get much worse,” said Sung Won Sohn, an economist at California State University. (Detroit Free Press, 11/14)

All the politicians, policy-makers and pundits are calling this the most serious crisis since the Great Depression of the 1930s. That crisis led to Hitler and the growth of fascism in much of the world, and World War II. It also led to the Chinese Revolution and the dramatic growth of the world communist movement, which ultimately crumbled under the weight of its own internal weaknesses and mistakes. The current crisis is pushing the world closer to World War III. What we do or don’t do will largely determine whether or not we are on the road to revolution. We must fight back.

The racist rulers will use Obama to try to buy time and win millions of black, Latino and white youth to invade Afghanistan and Pakistan. We can do better at leading our friends and CHALLENGE readers into the class war, and turn every battle, large and small, into a school for communist revolution. As Karl Marx said, “The point is not just to understand the world. The point is to change it.”

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‘Big 3’ Would Solve Auto Crisis on Workers’ Backs

DETROIT, MI, November 18 — The recent Congressional hearings on a possible $25 billion bailout of GM, Ford and Chrysler reflect the depths of the global economic crisis. The Detroit Big 3 auto bosses are clinging to life, despite shedding more than 150,000 jobs and getting billions in wage and benefit concessions from the workers in the 2007 contracts. Auto sales in October dropped to an annual rate of 10.8 million vehicles, the lowest in 25 years.

There are roughly 240,000 Big 3 workers, although only about 140,000 are UAW members, a 50% decline in three years and shrinking with every plant closing. This crisis shows that capitalism can’t meet the needs of the international working class and must be overthrown with communist revolution.

The effects of this crisis have an especially racist character. A large number of black and Latino workers will lose their jobs and their health insurance, leaving them open to drastic cuts in public services, all of which will further decimate their neighborhoods in cities like Detroit, Flint, Chicago and others. Our response to this crisis must be expanding the base for CHALLENGE and PLP among auto workers, while moving them into action against the system.

The more the UAW leadership allies itself with the bosses, the worse things get for the workers. With mass layoffs industry-wide, GM, Ford and Chrysler workers can unite with Toyota, Honda, Mercedes and BMW workers facing the same attacks. We can also reach out to millions of workers in parts-supplier plants, union and non-union.

But that won’t come from the UAW leadership that rides on the same corporate jets to sit beside their masters and beg for a bailout. We can form unemployment committees in our local unions and shops and unite across borders and across company lines.

Three million jobs are tied to the auto industry as well as the pensions and healthcare benefits of almost one million retirees. All this is at risk as GM burns through over $2 billion a month in cash reserves, having lost $20 billion from January to September. If GM goes under, it could take Ford and Chrysler with it, raising the possibility of a “foreign-owned” auto industry, as in Mexico and Canada. What was unthinkable a year ago is now possible.

Also, U.S. auto makers are not as critical to war production as they were 70 years ago. A “defense” industry has emerged with companies like General Dynamics, Navistar, Boeing, Northrop Grumman, and Lockheed Martin at its core (Chrysler sold its tank plant to General Dynamics about 20 years ago). GM, Ford and Chrysler produce no weapons of war now, despite decades of U.S. military aggression. In a future World War against a major imperialist rival, many “foreign-owned” auto and supplier plants could be converted to war production virtually overnight.

If there is a bailout, it will likely come as the new Obama administration guts the basically worthless auto contracts. SUB pay (Supplemental Unemployment Benefits) is almost sure to go, and wage-cuts are imminent like those imposed on the parts suppliers, especially the bitter three-month strike at American Axle.

While some bosses may perish, the racist profit system will survive. We have no interest in waving the bosses’ flag or sacrificing for their profits. We need to fight back and refuse to pay for the bosses’ crisis, while building a mass, international PLP to lead the fight for communist revolution.

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FALLING RATE OF PROFIT HITS WORKERS IN THE HEAD

The strike at Boeing Aircraft and other recent industrial actions show both the power of the working class, and the real value of our labor to the bosses. A four-week strike in 2005 probably cost Boeing at least $700 million in profit (Seattle Times, 9/29/08). An eight-week strike in 2008 ran Boeing over $2 billion in losses. Our ability to shut down production there gives us a small taste of the potential of the working class to lead society. However, strikes alone can never fulfill a vision of liberation from rule by a tiny minority of bankers, bosses, and investors.

Only through communist revolution can workers achieve an alternative to capitalism. The greatest limitations workers all over the world face today are political, the belief that we have no alternative to living under the bosses rule. However, more workers are looking for answers to the cause of the current economic crisis. Analyzing the political economy of capitalism, and connecting those ideas to specific events at the point of the class struggle, can move our class forward.

Productive labor creates all wealth in capitalist society. The bosses’ media and schools constantly prattle that advances in workers’ standard of living emanate from the “free market.” In reality, the free market today means bosses are gambling with riches they have stolen from us. During the last two “booms,” popular culture taught us to idolize and imitate speculators (Who Wants to Be a Millionaire; Deal or No Deal).

The current financial crisis is a product of basic laws of capitalist economics. Since the 1970s, instead of investing in more factories, U.S. banks have led the vastly increased speculation in stock and bond markets. Karl Marx discovered long ago that, as capitalism matures, the rate of profit, i.e. the amount of profit per dollar invested, tends to fall.

Because capitalism is a competitive system, each boss must try to produce things more cheaply than the next one. Individual capitalists save money by introducing more machinery into production, thereby reducing the number of workers. Other bosses in the same industry are then forced to automate in order to keep up. The result for all bosses and the investors who back them is a much higher amount of money sunk into technology, resulting in a lower rate of profit.

According to economist Robert Brenner, profit rates at U.S. non-financial corporations in 2000-2006 were one-third lower than in the 1950s and 1960s.  On a global scale, there were large drops in the rate of profit in industrial economies after the late 1960s through the early 1980s. The basic trend, with some minor upturns, has continued through the present. This has come as rivalries between major industrial powers have grown.

Capitalists typically use several methods to try to avoid the tendency of the rate of profit to fall: 1) In a crisis, more and more factories are closed; the weaker firms are taken over by the stronger ones, temporarily giving the bigger fish more of a global edge (e.g. GM taking over Chrysler); 2) increased exploitation of the whole working class (the decline in real wages in the U.S. since 1973 and increased cutbacks in benefits); and 3) greater use of racism, to super-exploit a section of the working class (e.g. increased use of immigrant labor in basic industry).

The bosses also try to counteract the falling rate of profit by investing in the “developing” world. They are able to do this because of uneven development under capitalism, i.e. the vast levels of inequality that exist. This allows them, for a time, to extract larger amounts of value from these more exploited workers. However, this only gets them so far. Class struggle is a given under capitalism-; workers always fight back, putting upward pressure on labor costs. Also, local bosses resist imperialist attempts to take over labor markets in “their” countries. For example, China recently required all foreign companies to allow Chinese“Communist” Party-led union organizing.

The main thing driving events in the world today is the fight between rival imperialist powers. For example, competition in the banking industry has been fierce. In 1999, Clinton signed the repeal of the Glass-Steagall Act, the Depression-era law that had separated investment banking, commercial banking and insurance business. U.S. banks saw this law as the last barrier to them expanding into areas of speculative investment that were wholly unregulated. Europe had already removed that separation for many of their banks. To maintain their competitive edge, U.S. bankers decided their government also had to get rid of it (Obama economic adviser Robert Rubin and McCain economic adviser Phil Gramm were key players calling for the repeal).

In the end, billionaire bankers and investors were forced to turn into players at a gigantic gambling casino. They turned to more and more exotic investments in order to try to maximize their rate of return. In the late ‘90s it was the “dot-com boom” and now it is “collateralized debt obligations” and “credit default swaps.” These latest attempts to profit off of an increase in paper wealth are far-removed from the value created (and stolen) through the production process. They are ultimately doomed to fail.

When that happens, the capitalists turn to their “final solution” to the falling rate of profit- -— war and world war. Wars destroy large amounts of productive capacity, allowing the capitalists to start the cycle of development all over again. They also settle, temporarily, the imperialist fight over markets, labor, and resources that led to the wars. However, new rivalries will always arise.

The U.S. bosses’ government, including McCain and Obama, claimed that if we didn’t bail out the speculators to the tune of $700 billion, “ the system will collapse.” Would that were true. Nothing short of a communist revolution can end the horrors of capitalism. After the revolution, we must do everything possible to ensure that the capitalists will never be able to reassert their control.
We say down with their system of rewarding those who create no value, serve no useful purpose, and hedge their bets with value stolen from our labor. Communist revolution will put these profiteers and their political henchmen under the ground, and lay the groundwork for a society where useful labor will serve the collective good.J

SNAKE OIL

Collateralized debt obligations are home mortgages bundled together in large groups and sold by mortgage companies and banks to investment banks or other institutions, who in turn usually sell packages of these mortgages to hedge funds, pension funds, and overseas banks.
A credit default swap is an insurance contract between two parties. The first party “buys” the swap in order to protect against the possibility of default in payment on a bond or other promise of payment, and the second party “sells” the swap by taking payment in return for a guarantee of the bond or other promise of payment should the institution issuing the bond fail to make good on it.

Grand Theft Capitalism

Capitalism is based on production of commodities. Each commodity “satisfies human wants of some sort or another” (Marx, Capital Vol.1) Each commodity has a “use value.” “Use-value” is the measure of the utility of any particular commodity in satisfying those wants. For example, a loaf of bread has value as a life-sustaining source of food.
Like other commodities, labor power has a use value. This is because labor power is uniquely capable of adding value to raw materials in production. From this new value, the capitalist who buys the labor power pays the lesser part to the worker in wages, and keeps the greater part as surplus value. Surplus value is the source of all capitalist profits.

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Unemployment Spreading Worldwide

Both bosses’ candidates, Obama and McCain, build false consciousness among many U.S. workers. McCain jabbers about Joe the Plumber, a non-union, right-wing plumber who has illusions about owning a plumbing business. Obama babbles on about how the “middle class” is hurting. But the working class, the overwhelming majority, did not benefit from the “boom” years of the ’90s and is now hurting even more from the current capitalist economic tsunami.

For millions of workers, capitalism in the U.S. and worldwide in the last three decades has meant lower wages, union-busting, racist and fascist ethnic cleansing from the Balkans to Iraq to Rwanda to the U.S. (with 2.4 million in jail, mainly black and Latin males). Endless wars, racist-fascist terror and mass unemployment are the main aspects of global capitalism.  In fact, the director of the UN’s International Labor Organization estimates that the current capitalist crisis will increase unemployment by 20 million worldwide.

According to the AFL-CIO (and it ought to know), over 45 million U.S. workers earn $10.20 an hour or less. One of four earns $9.60/hour, the official poverty rate for a family of three. And 15 million workers earn the minimum wage, $6.70/hour. Among black workers, one of three earns the poverty wage or less.

Throughout the entire history of the profit system, the only time “full employment” has ever existed is during world war — and then only in the more advanced capitalist countries which are the main antagonists of such wars.

Many compare the present crisis to the Great Depression of the 1930s when one-third of the working class in the leading capitalist nations was jobless. It was only when a military draft was enacted and during World War II when countries’ industries became completely devoted to war production that anything approaching “full employment” materialized.

Of course, that presumes that tens of millions in WWII uniforms could be labeled “employed” (at least 14 million in the U.S.). Meanwhile, the main warring capitalists in Germany, Japan, the U.S. and Britain geared total production for the weapons of war. It was only then that capitalism could claim the unemployment problem had been “solved.” The German and Japanese fascists used millions of slave laborers for their war production. The war wiped out 100 million people permanently, including tens of millions of workers. A similar capitalist “solution” to the current crisis is not far-fetched.

The only country without any unemployment before WWII was the Soviet Union which had no private profit system; the source of unemployment, racism and war. It lost 25 million people in the war while its Red Army defeated the bulk of the Axis fascist armies.

Capitalism is based on the accumulation of maximum profits. The only source of profit is the value created by workers in the course of production. However, workers’ wages do not equal the full value they create. If that were true, there would be no profit for the boss. So the bosses try to keep workers’ wages at the lowest level possible, turning as much of the value workers create into profits for the bosses.

But each individual capitalist is competing against all his/her rivals for the maximum share of the market, and produces as much as they think they can sell. However, nothing is planned. So overproduction results, exceeding what the market can buy. Those capitalists who can produce at the lowest possible cost push aside many of their rivals. The latter, seeking to reduce costs to stay in business, feel compelled to achieve that by cutting labor costs, leading to either wage-cuts or mass layoffs, or both. Thus, unemployment is intrinsic to capitalism.

Racism is one of the main weapons capitalists use to reduce their costs. Historically, they relegate various sections of the working class to “second-class” status — the lowest wages, the hardest jobs, the last hired and first fired, and the worst-off in other aspects of life: housing, healthcare, education, etc. In the U.S., this super-exploitation has fallen on black workers, going back to slavery, and in the last two centuries also on Latino and Asian workers. (This does not include the genocide perpetrated against Native Americans who suffer the highest rate of joblessness, 90%.)

The capitalist class reaps super-profits from this racism, partly from the difference in family income between white workers and that of black, Latino and Asian, and partly because the bosses use the lower wages of super-exploited workers to drag town the wages of the entire working class. In the U.S., this difference amounted to $250 billion annually a decade ago, and is probably much higher when figuring in capitalist competition using racism on a world scale, not just within each capitalist country.

Since China has become a full-blown capitalist country, the imperialists have used its huge cheap labor to shift production away from relatively higher-paying areas. Others — India, Latin America, Vietnam and the former Soviet-bloc countries in Eastern Europe — have been used to “outsource” jobs. This “globalization,” in turn, has also been used to lower workers’ wages in the imperialist countries, and even to subcontract key industrial jobs in auto, steel, aerospace, etc., to low-paying non-union areas all across the southern U.S. and California. Racism against immigrant and black workers has been crucial in this process. The pro-capitalist policies of the union leadership have helped the bosses carry out this massive attack.

This competition for profits, and for resources such as oil, gas and minerals needed for modern capitalist production, as well as to equip modern armies, is what leads to military confrontation: war. And not limited to wars between two countries, but to world war. This “solution” to inter-imperialist competition plus the mass unemployment produced by the general competition among bosses in one country and between corporations internationally is part and parcel of capitalism. This is what produces the cycles of “boom” and “bust,” of recessions and depressions. This is the history of capitalism.

Obama and McCain constantly prattle about concern for “the middle class.” They rarely, if ever, use the term “working class.” But classes are defined by their relation to the means of production. U.S. workers who might earn $50,000 a year and manage to hang on to their houses and cars are labeled “middle class” and are even portrayed as “future owners of small businesses.”

But auto or aerospace workers (or plumbers) can be laid off tomorrow, victims of the bosses’ drive to cut costs to maintain profits, and their homes and cars go up in smoke. Currently millions of U.S. workers are losing their houses because of the capitalists’ scams to make paper profits from subprime mortgages, because profit rates from these swindles exceed those that can be reaped from industrial production.

Workers and youth who think a President Obama will “create good jobs” will soon be disillusioned. These jobs will either be civilian ones, the “National Service-type,” with low wages and no benefits or contain the military “option” to carry on U.S. rulers’ oil wars worldwide.
We must be involved with these working-class youth in their mass organizations and win them to see that, under capitalism, their desire for “decent jobs, healthcare, education and housing” is a mirage. We must be part of their daily fights in order to transform them into intensified class struggle between the two classes and use this opportunity to build the Progressive Labor Party. Our goal must be communist revolution to abolish capitalism, its system of wage slavery and racist super-exploitation.

While capitalist crises in and of themselves will not topple the system, they do open the door to building a movement and Party that can lead to the destruction of that system. This is the working class’s only way out of the insufferable horrors of the profit system.

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Voting Won’t End Nightmare for 20 Million Unemployed Workers

Voting for either set of warmakers — Obama-Biden or McCain-Palin — won’t end the nightmare suffered by over 20 million workers who are either unemployed, have given up seeking non-existent jobs or are working part-time because they can’t find full-time jobs. Capitalism marches on!

While the “official” jobless rate rose to 6.1% (highest in five years), this excludes the other two categories above, so the real rate is 16.8%. And because of racist discrimination, unemployment rates among black workers are double that of white workers, and 60% higher among Latinos.

This is a full-fledged recession, although — as the saying goes — if your neighbor’s out of work, it’s a recession; if you’re out of work, it’s a depression.

Still worse, inflation has been outstripping wages, so the so-called Misery Index — unemployment + inflation — is at 11.7%, the worst in 17 years.

Of the 600,000 jobs wiped out in August, there are nearly as many college graduates as high school graduates; the jobless are up among adults, many over 45, not just teenagers, as unemployment rose for the 8th straight month, the most sustained increase in 25 years.

Combined with this picture is the home foreclosure rate, triple three years ago and the highest in nearly three decades. Unemployment feeds the foreclosures, leading to a downward spiral for millions of working-class families. In the next four months, the airlines will lay off 36,000. State and local governments will continue to cut back because of lower tax revenues. And the shakiness of the banks, credit and stock markets are heading towards a “financial tsunami,” predicts the manager of the world’s largest bond market — as it was shown by the virtual nationalization of the mortgage giants Freddie Mac and Fannie Mac. So the Treasury arranged a deal that throws Fannie and Freddie shareholders over the side, but promises to protect Wall Street and foreign creditors (from China, Japan, oil-rich Gulf emirate and even Russia). Without these big lenders, credit would dry up and the blow to the bosses’ economy could be historic. So, the feds couldn’t wait till after the elections. Neither Obama nor McCain opposed this huge robbery of workers’ tax money.

Eventually it could cost $500 billion to save these mortgage giants.

With U.S. imperialist wars in Iraq and Afghanistan (and Pakistan and Iran looming?), trillions in workers’ and future workers’ income taxes are being sucked into the bottomless military pit the ruler’s system has created, while simultaneously slaughtering millions of workers internationally.

Meanwhile, Obama and McCain continue to spout “concerns” for the jobless and offer meaningless “programs” for stimulating the economy, even as the last “stimulus” of $160 billion this past spring failed miserably to ward off a deepening recession. And they still propose troop increases for Afghanistan and the Army in general, to funnel more billions down the drain to protect their oil empire against rival imperialists in Europe, Russia, Japan and China.
Not one U.S. president has ever ended unemployment because the profit system by definition cannot provide full employment. Capitalism operates on cutthroat competition. As one set of bosses wins the competition, another set loses and inevitably cuts costs to try to maintain profits by laying off thousands and millions of workers. With “globalization” permeating the capitalist world, Toyota wins and GM loses, cutting tens of thousands of jobs. Even the one GM department that was making money, GMAC (its financial arm) has just announced 5,000 layoffs.
We in PLP call on workers not to vote, instead to organize breaking with all these politicians and union hacks who are all serving the bosses. Instead of blaming immigrant or workers from other countries or even other areas for losing jobs, we must unite internationally. This unity is key to fighting for the only solution to joblessness and endless wars this racist profit system breeds: a workers-led communist society with no bosses, no profits, no wage slavery. That’s PLP’s goal. It’s a lifetime job. Join us.

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Candidates Reap Million$, Workers ‘Reap’ Unemployment

The two lead stories on the April 5 NY Times front page present a clear picture of capitalism as an exploitative class system. One says, “80,000 JOBS LOST” (in March). Adjoining that is, “Clintons made $109 million In Last 8 Years.”

A single Clinton speaking engagement rakes in “upwards of $250,000,” (NYT) more than the median family yearly income of five working-class families, in just one “lecture”! Seems talk is not exactly cheap, especially in the top one-hundredth of one percent of U.S. incomes.

Not that Obama or McCain are exactly poor. The Obama family income exceeded one million bucks in just one year (2006). (NYT) And the McCain family assets, including the fact that his wife is “an heiress to a beer distributorship fortune, are worth tens of millions of dollars.” (NYT)

These are the millionaire politicians who have never helped workers and who defend and enforce their capitalist system which has launched massive attacks on the working class: wage-cuts, huge layoffs, more racist cops to terrorize workers and youth, big talk about healthcare while the uninsured approach 50 million. And yet the union misleaders and reformers tell us the “solution” is to vote for Obama or Clinton, pouring our dues money into their campaigns. What crap!

PLP has always advocated, “Don’t vote, organize!” to answer these attacks.

Meanwhile, the monthly jobless increase was actually 222,000 since “the government added 142, 000 make-believe jobs to the count” (John Crudele, NYPost, 4-8), the highest in five years, rising for the third consecutive month. It’s across the board, covering both industry and service areas. But, of course — as CHALLENGE has consistently reported — the 5.1% unemployment rate is a fraud. That figure, representing 7.8 million jobless, excludes “discouraged” workers who’ve given up searching for non-existent jobs and those working part-time because they cannot find full-time jobs. That’s another 9.4 million workers, a total unemployment of 17.2 million — a 12.5% jobless rate.

This still doesn’t include people on welfare who can’t find jobs, nor those youth whose joblessness drove them to join the military. Nor the two-thirds of the 2.4 million in prison for non-violent, mostly drug-possession convictions who could ordinarily be at home or in rehab, also seeking non-existent jobs. All told, U.S. unemployment is probably somewhere around 20 million.

Because of racist discrimination, unemployment for black workers is twice that of whites. The “official” figure is black 9%, white 4.5%. But the true figure for black workers is about 25%, double the actual nationwide rate of 12.5%.

The liberal Democrat’s “solution” is to extend unemployment benefits, a goal rarely reached in this one-class-rules-all “two-party” system. And that excludes more than half of U.S. workers who are ineligible for any benefits (including millions of undocumented immigrants), something Obama and Clinton never mention when shedding crocodile tears for jobless workers. McCain’s hair-brained “solution” is more tax cuts for the rich and less regulation of the Wall Street investment houses making out like bandits.

Unemployment is an integral feature of the profit system and always will be as long as capitalism exists, driving for maximum profits by stealing the value that workers create and stuffing it into the pockets of the bankers, oil companies and Big Business. They go to war to protect their fortunes over workers’ dead bodies, much as they war on the working class at home. They will continue to do so until workers destroy their system and enable our class to share all the wealth we create among working people, according to need.

One big step towards that goal is to march on May Day, uniting black, Latino, Asian and white, immigrant and native-born, women and men, building PLP as the party to lead the working class against the ravages of capitalism.

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